Real Estate Lead Generation & Conversion

Norm Werner is a Realtor in Milford, MI. He is also the editor and chief contributor to The Milford Real Estate Scene blog.

I read and post to lots of real estate oriented blogs. The topic of buying leads often pops up in those forums. It’s interesting how few agents actually post to these discussions that they buy leads, probably because the “Oh, no, don’t buy leads” voices are so strong and loud. It’s as if they wanted to burn a big scarlet “L” in your forehead if you admit to buying leads. Well, I buy leads and have for years. Like anything else it’s a numbers game. You chase 10-20-30 bad leads for every one that pays off; however, I’ve never had a year yet when I couldn’t look back and see the business that I got from the leads and determine that the sales that I made not only paid for the leads, but also ended in a profit for me.

I suppose that there is a number of bogus or shady lead selling companies out there. I’ve certainly been approached by many and turned them all down, too. I don’t pay any commission or per deal charge, just a monthly fee for X-number of leads. I’ve switched back and forth as the market changed between buying listing leads or buyer leads – right now I’m on the buyer side.

I also get leads from my company – relos and leads off it’s Internet presence – but those come at a price too – a split on the resulting business, so they’re not free either. Perhaps the lead-buying nay-sayers are old timers in the business who get much of their business from referrals by past customers. I too get some business that way; however, in the current market one needs multiple sources of potential business and buying leads is one possible source. The key, I think, is to find an honest company with a strong Web presence, since that’s where potential buyers and sellers are starting these days. I also have four real estate Web sites that I run, from which I get leads.

I’ve also posted on occasion about a secondary benefit of working these paid leads – the experience that results. When I was doing 2-3 CMA’s a week for seller paid leads, I got lots of market pricing experience in lots of local neighborhoods. Now, as I work with potential buyers, I’m showing houses in lots of different neighborhoods, too. All of that adds to my experience base.

So, before you let the nay-sayers scare you completely off buying leads, look around at a few of the companies out there that might be able to give you something to work on that could lead to business. Sure it costs money, but then sending out postcards or buying door hangers or any number of other prospecting methods also cost money and may have about the same ROI potential. Email me if you want to know which company I buy leads from and I’ll tell you.